Mr. Moran (for himself and Ms. Heitkamp) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to clarify the
treatment of general welfare benefits provided by Indian
tribes.

1.

Short title

This Act may be cited as the
Tribal General Welfare Exclusion Act
of 2013.

2.

Indian general
welfare benefits

(a)

In
general

Part III of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting before section 140 the following new section:

139E.

Indian general
welfare benefits

(a)

In
general

Gross income does not
include the value of any Indian general welfare benefit.

(b)

Indian general
welfare benefit

For purposes of this section, the term
Indian general welfare benefit includes any payment made or
services provided to or on behalf of a member of an Indian tribe (or any spouse
or dependent of such a member) pursuant to an Indian tribal government program,
but only if—

(1)

the program is
administered under specified guidelines and does not discriminate in favor of
members of the governing body of the tribe, and

(2)

the benefits
provided under such program—

(A)

are available to
any tribal member who meets such guidelines,

(B)

are for the
promotion of general welfare,

(C)

are not lavish or
extravagant, and

(D)

are not compensation for services.

(c)

Definitions and
special rules

For purposes of this section—

(1)

Indian tribal
government

For purposes of this section, the term Indian
tribal government includes any agencies or instrumentalities of an
Indian tribal government and any Alaska Native regional or village corporation,
as defined in, or established pursuant to, the Alaska Native Claims Settlement
Act (43 U.S.C. 1601 et seq.).

(2)

Dependent

The
term dependent has the meaning given such term by section 152,
determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B).

(3)

Lavish or
extravagant

The Secretary
shall, in consultation with the Tribal Advisory Committee (as established under
section 3(a) of the Tribal General Welfare Exclusion Act of 2013), establish
guidelines for what constitutes lavish or extravagant benefits with respect to
Indian tribal government programs.

(4)

Establishment of
tribal government program

A program shall not fail to be treated
as an Indian tribal government program solely by reason of the program being
established by tribal custom or government practice.

(5)

Ceremonial
activities

Any items of
cultural significance, reimbursement of costs, or cash honorarium for
participation in cultural or ceremonial activities for the transmission of
tribal culture shall not be treated as compensation for
services.

.

(b)

Conforming
amendment

The table of
sections for part III of subchapter B of chapter 1 of such Code is amended by
inserting before the item relating to section 140 the following new
item:

Sec. 139E. Indian general welfare
benefits.

.

(c)

Statutory
construction

Ambiguities in section 139E of such Code, as added
by this Act, shall be resolved in favor of Indian tribal governments and
deference shall be given to Indian tribal governments for the programs
administered and authorized by the tribe to benefit the general welfare of the
tribal community.

(d)

Effective
date

(1)

In
general

The amendments made
by this section shall apply to taxable years for which the period of limitation
on refund or credit under section 6511 of the Internal Revenue Code of 1986 has
not expired.

(2)

One-year waiver
of statute of limitations

If
the period of limitation on a credit or refund resulting from the amendments
made by subsection (a) expires before the end of the 1-year period beginning on
the date of the enactment of this Act, refund or credit of such overpayment (to
the extent attributable to such amendments) may, nevertheless, be made or
allowed if claim therefor is filed before the close of such 1-year
period.

3.

Tribal Advisory
Committee

(a)

Establishment

The
Secretary of the Treasury shall establish a Tribal Advisory Committee
(hereinafter in this subsection referred to as the
Committee).

(b)

Duties

(1)

Implementation

The Committee shall advise the Secretary on
matters relating to the taxation of Indians.

(2)

Education and
training

The Secretary shall,
in consultation with the Committee, establish and require—

(A)

training and
education for internal revenue field agents who administer and enforce internal
revenue laws with respect to Indian tribes on Federal Indian law and the
Federal Government’s unique legal treaty and trust relationship with Indian
tribal governments, and

(B)

training of such
internal revenue field agents, and provision of training and technical
assistance to tribal financial officers, about implementation of this Act and
the amendments made thereby.

(c)

Membership

(1)

In
general

The Committee shall be composed of 7 members appointed as
follows:

(A)

Three members
appointed by the Secretary of the Treasury.

(B)

One member
appointed by the Chairman, and one member appointed by the Ranking Member, of
the Committee on Ways and Means of the House of Representatives.

(C)

One member
appointed by the Chairman, and one member appointed by the Ranking Member, of
the Committee on Finance of the Senate.

(2)

Term

(A)

In
general

Except as provided in
subparagraph (B), each member’s term shall be 4 years.

(B)

Initial
staggering

The first appointments made by the Secretary under
paragraph (1)(A) shall be for a term of 2 years.

4.

Other relief for
Indian tribes

(a)

Temporary
suspension of examinations

The Secretary of the Treasury shall suspend
all audits and examinations of Indian tribal governments and members of Indian
tribes (or any spouse or dependent of such a member), to the extent such an
audit or examination relates to the exclusion of a payment or benefit from an
Indian tribal government under the general welfare exclusion, until the
education and training prescribed by section 3(b)(2) of this Act is completed.
The running of any period of limitations under section 6501 of the Internal
Revenue Code of 1986 with respect to Indian tribal governments and members of
Indian tribes shall be suspended during the period during which audits and
examinations are suspended under the preceding sentence.

(b)

Waiver of
penalties and interest

The
Secretary of the Treasury may waive any interest and penalties imposed under
such Code on any Indian tribal government or member of an Indian tribe (or any
spouse or dependent of such a member) to the extent such interest and penalties
relate to excluding a payment or benefit from gross income under the general
welfare exclusion.

(c)

Definitions

For purposes of this subsection—

(1)

Indian tribal
government

The term Indian tribal government shall
have the meaning given such term by section 139E of such Code, as added by this
Act.

(2)

Indian
tribe

The term Indian tribe shall have the meaning
given such term by section 45A(c)(6) of such Code.

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